Own: Equity without Entry Barriers
This week we are welcoming Sascha Ragtschaa, CEO & Co-Founder of WeOwn, a digital investment platform connecting high growth businesses with everyday investors using STO technology.
WeOwn has an ambitious vision to change the financial services market, making it easier and more affordable for companies to raise capital, and investors to explore new opportunities, while providing a great user experience. WeOwn has already launched a successful platform for issuance, investor management and engagement, and Sascha and his team have now set their sights on transforming the stock market.
Enjoy the Interview
What problems is WeOwn trying to solve?
Fundamentally, we want to make it easier for high growth companies to access capital, and for investors to get equity in these high growth companies. The traditional financial markets are complex and expensive, involving many intermediaries. We are using STO technology to make fundraising simpler, easier and more affordable — lowering the entry barrier for both companies and investors. We’re particularly focussed on helping established SMEs to scale up. They may have had some initial backing or done a crowdfunding round, but now they need to fundraise on a bigger scale, but IPOs are just far too onerous and expensive.
What makes WeOwn special compared to other investment platforms?
There are other platforms in the STO space, but they are focused predominantly on issuance. The WeOwn platform supports the complete end-to-end investment lifecycle, from initial offer through to — what we’re currently working on — the secondary market. WeOwn and our network of partners can take care of everything, from incorporation to legal requirements, KYC and AML, insurance and tax reporting.
We’ve built-in servicing tools to our platform that enable investor data to be securely managed and updated in real-time, and we’ve digitised many of the traditional investor engagement methods such as annual general meetings, so companies and investors can provide instant online feedback on key company events. As I mentioned, the next part of the picture is developing the world’s first global decentralised stock exchange, to complete the asset lifecycle management circle. We’ll be sharing more details about this in the near future.
Added together, all of these features make us unique in the market. There’s no need to engage with any third parties when issuing a security or investing through our platform.
What is your criteria for onboarding businesses that wants to raise funds via WeOwn?
We have a few requirements. Firstly, we need to make sure the company does not operate in a so-called ‘red flag’ field that we don’t support, such as weapons, gambling or commodity trading. We also carry out a basic check to make sure there aren’t any legal issues affecting a company’s viability.
If all is fine then we’ll move forward to an exploratory discussion with the company, where we’ll go over their needs, resources and time frame for raising funds, to see how we can best support them.
For you, what makes a good investment?
Obviously it has to make good business sense, but more than that, I want to invest time in something that I understand and believe has potential — whether that’s a particular market, team member or general business opportunity.
The way we consider clients is no different to the way investors consider them, and WeOwn is particularly interested in companies within that scale-up ‘sweet spot’, which we can really help to grow.
Are all your investment opportunities Security Tokens?
Yes, we only facilitate equity, debt and fund issuances. At this moment in time, our primary focus is equity.
Who is eligible to invest through your platform?
Anyone from the EU, plus accredited US investors. At present, we allow for either US or EU issuance, so there’s also the possibility of a hybrid EU/US offer. However, it’s important to note that companies and investors in every region are subject to KYC and AML checks, to verify their suitability.
What are the biggest challenges when creating an easier process that brings the average retail investor and high growth SMEs together? How can Security Tokens make life easier?
From a fundraising perspective, the biggest challenge is ensuring that each company has a solid business case. One of the big differentiators between STOs and crowdfunding is the maturity of the audience; micro businesses and early start-ups can raise money through a crowdfunding without having a clear strategy in place. We’re looking for companies that have a proven track record, have conducted initial investment rounds, and perhaps now need resources to diversify into another sector, or step up their business vision.
From an investor perspective, the challenge is educational. Most investors either lack the capital to participate in traditional finance markets, or they simply don’t have access to series A/B investments. And if they have explored opportunities before, they are tied into funding platforms and don’t own any stock.
We need to show them that there is a cheaper, easier way to explore new investment opportunities. That they hold actual rights to the equity they have purchased, and that the Security Token approach enables us to fractionalise shares, so they can start small if they’re worried about financial commitment.
In your experience, what is the biggest misconception people have about Security Tokens?
People are still comparing Utility Tokens to Security Tokens and vice versa, but one stands for a stake in a network, while the other represents a stake in a company’s equity. To help more people understand the difference between the two, we regularly publish content on the topic, and we’ve even built a mobile game — called SillyCoin Valley — to help educate investor audiences.
What is the most exciting happening you are waiting to see in the Security Token ecosystem heading towards 2020?
The STO market is still in its infancy; we’ve seen companies move into this space prematurely and then exit again. For those who are staying and playing, it’s exciting to see new innovations being released, with fintechs pushing the envelope on service and user experience.
It’s also exciting to see dynamic companies using the STO model to raise capital. WeOwn has just launched our first offer with Prowd, a next-generation recruitment platform using the blockchain to change the way that employers and recruiters connect with talented freelancers. I look forward to seeing their success, and the success of other companies.
What was the best thing you’ve learned during the past 12 months?
Don’t shy away when an opportunity presents itself! Also, listen to and trust your peers; it’s easy to let outside forces push you in a certain direction, but however well-intentioned that advice, they don’t always have a full understanding of the overall company vision and macro dynamics involved in decision making. At WeOwn, we’re very lucky to have a talented, hard-working team that are all on the same page when it comes to creating a new approach to digital investment.
Thank you for the Interview!
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